Retina Pro -- Audio Distortion on External Speakers

I just ran into a weird problem with my retina pro -- a quick google search didn't turn anything similar up.

Just hooked it up to a set of external computer speakers and found that if I have the volume max or near-max on the macbook and use the speakers volume knob to control the volume, the sound is absolutely horribly distorted and crackley.

If I turn the macbook volume down lower, however, and turn the speakers up to compensate, it sounds a thousand times better.

I've never experienced this kind of behaviour with any device -- I was always under the impression that the source device having higher volume would generally give better results (e.g. my iphone on the same speakers).

The source audio files were .flac, so that's not the issue. Is this a problem with my macbook's sound hardware? what gives?

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